The satellite television company booked earnings of $175.9 million, or 38 cents a share, compared to $215.6 million, or 47 cents a share, in the same period a year earlier. Revenue improved 6.5% to $3.59 billion.

Analysts were looking for a stronger profit of 44 cents a share and revenue of $3.58 billion.

Dish’s earnings were hampered by a 7.7% increase in total costs, while the company added more TV subscribers than the year-ago period. Dish added 40,000 net pay-TV subscribers in the first quarter, up from 36,000. Its subscriber base remained roughly flat at 14.1 million.

Englewood, Colo.-based Dish and rival DirecTV (DTV) have been the subject of speculation over additional consolidation in the pay-TV industry. In February, Comcast (CMCSA) agreed to buy Time Warner Cable (TWC) for $45 billion, pending regulatory approval.

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According to news reports, AT&T (T) recently approached DirecTV about acquiring the nation’s No. 1 satellite TV company. A report from The Wall Street Journal on Wednesday said DirecTV is working with its advisers to evaluate a possible deal.

Meanwhile, analysts have said a merger of DirecTV and Dish could make financial sense for both companies.

DirecTV reported a 19% decline in its first-quarter earnings earlier this week. The company added fewer U.S. subscribers and was hit by a currency change in Venezuela.